"We know it's going to be insolvent if we don't take action," he said. "You don't want to wait until it gets there."

But the plan should not harm cities, he said.

"All of your experience is gone, and it's not just losing employees," Darnell said. "It can't be that big of a shock, but we know that something has to be done. If the legislature passes something radical, we're looking at a lot of people leaving."

It gives public employees incentives to retire as soon as they are eligible rather than waiting.

Although PERA's investment returns improved during fiscal year 2012 and the first quarter of fiscal year 2013, officials say they are not relying to market performance to drive a recovery.

A PERA report from July 30, 2012 showed that the organization's unfunded liability increased by $1.2 billion, from $5 billion to $6.2 billion, and its funded status declined from 70.5 percent to 65.3 percent.

An unfunded liability is the shortfall between the amount of money needed to pay for all current and future benefits and the money in the fund.

According to PERA's Oct. 23 presentation, the retirement fund is expected to reach 100 percent funded status by 2042 if the policy reform proposal is adopted.

A provision in the state constitution may also be complicating the situation.

New Mexico is the only state in the country that has made pension benefits a property right for PERA members and for retired teachers. The constitutional provision limits the changes to benefits that can be made.

Article XX, section 22 of the New Mexico Constitution outlines policy related to public employees and education employees retirement trust funds, and protects each system's retirement funds and benefits from misuse and abuse.

Clause C of the section gives the boards of each fund "sole and exclusive power," over the money and prevents the state legislature from making laws that increases benefits paid by the system without enough funding available.

Clause D gives retirement plan members a "vested property right," to the funds once they become eligible for retirement.

Earlier this year Santa Fe lawmakers passed a resolution requiring the PERA Board and the Investment and Pension Oversight Committee to pay off PERA's $6.2 billion unfunded liability by June 30, 2014. The resolution also called for the board to create plans to reach long-term fund solvency.

For Farmington's elected officials and staff, the next few months will likely be a waiting game.

According to Scott Scanland, the city's lobbyist in Santa Fe, about a quarter of the legislature will be brand new.

"They're coming off of a very contentious election cycle," he said. "It was the most expensive election in (state) history. The survivors, I think, are coming up with some very hard feelings."